5 Overlooked Benefits of Going Solar for Your Business
Switching to solar power is a smart business decision beyond just energy savings. While the cost savings are clear, as shown by Metro Storage's $8,600 in first-year savings, there are also some hidden benefits you may not have considered. Read on for five overlooked advantages of installing solar panels on your commercial building.
1. Tax Credits and Incentives Can Reduce Costs Significantly
The federal Investment Tax Credit (ITC) offers commercial and industrial businesses a 30% tax credit on the costs of installing a solar energy system. This can cut nearly a third off the total upfront costs. Additionally, solar projects may qualify for accelerated depreciation through the Modified Accelerated Cost Recovery System (MACRS). This allows businesses to deduct 85% of solar installation costs over the first 5 years.
At the state level, the Illinois Solar Renewable Energy Credit (SREC) program provides long-term incentives for solar generation. Over the 20+ year lifespan of a system, SRECs can add up to thousands in savings. And utilities frequently offer upfront rebates and net metering programs, which provide bill credits when your solar system generates surplus power. Taken together, these incentives can reduce the payback period and generate substantial long-term savings.
2. Solar Increases Property Value
Installing solar panels enhances the value of your property in several ways. First, it shows potential buyers and tenants that you are investing in leading-edge technology and sustainability. Second, guaranteed electricity costs through a PPA or lease can make operating expenses more predictable. Third, on-site solar means the property is energy-independent and insulated from utility rate spikes. This makes the building more attractive for tenants who want stable, affordable utility bills.
Real estate studies have shown that commercial buildings with solar systems tend to have higher property values and sell for more than comparable buildings without solar. For business owners thinking about eventual resale down the line, installing solar is a value-add.
3. Solar Protects Against Rising Energy Rates
Electricity rates have been increasing across the country for years. Over the past year, electricity rates have risen sharply by 15.8%, driven predominantly by expensive natural gas prices. Locking in a solar PPA lets you secure a fixed rate for your electric needs for 20+ years. This protects you from volatile utility pricing while locking in predictable energy costs.
4. Solar Enhances Branding and Public Image
Switching to solar visibly demonstrates your company's commitment to sustainability. It's one of the most prominent ways to showcase your environmental credentials. In effect, your roof becomes a branding billboard advertising your values. This eco-friendly messaging can appeal to environmentally conscious consumers who may prefer to support greener businesses.
Fossil fuel plants emit pollutants like sulfur dioxide, nitrogen oxides, and particulate matter that harm air quality and human health. These negative externalities are avoided when generating electricity from clean solar power. The US Department of Energy reports that on average, 0.85 pounds of carbon dioxide are emitted per kilowatt-hour of electricity generated in the United States. So a typical 400 watt solar panel, which can generate around 600 kilowatt-hours of electricity per year (1.5 kWh per watt per year x 400 watts), would offset about 510 pounds (600 kWh x 0.85 lbs/kWh) of carbon dioxide emissions annually if used in place of conventional electricity generation. That's the equivalent of the amount of CO2 emitted by driving an average passenger car approximately 1,100 miles.
In urban areas, lower-income communities and communities of color are disproportionately impacted by pollution from non-renewable energy. Embracing solar helps address environmental justice issues and reduce pollution-related illnesses like asthma. It also curbs emissions that contribute to climate change. As a business leader, you can demonstrate social responsibility by improving local air quality through solar.
The incentives, property value, stable rates, branding, and health benefits make a compelling case for commercial solar. While the energy savings themselves pay off the investment in just a few years, these overlooked advantages multiply the value proposition. Contact us at tad@GAINrenewables.com to assess options tailored for your property today.